The trial’s failure also “puts a dent” in the amyloid hypothesis of Alzheimer’s treatment, as our own Ben Fidler reported last week. As Fidler explained, “The hypothesis holds that Alzheimer’s is the result of clumps of amyloid protein, called plaques, and that clearing them from the brain with a drug might slow or even halt the decline of patients’ memory loss. Many drugs, including solanezumab in an earlier set of trials, have failed to show that clearing out plaques can help patients’ memory.”

Mark Gurney, CEO of Grand Rapids, MI-based Tetra Discovery Partners, finds opportunity in Lilly’s setback. Tetra’s lead Alzheimer’s drug candidate is called BPN14770; rather than attacking amyloid deposits, it helps neurons in the brain make new connections and is designed to treat memory loss in earlier-stage patients. Tetra’s discovery platform hinges on drugs targeting a family of related enzymes known as Type 4 phosphodiesterases (PDE4) that can be used to treat cognitive impairment. Phase 1 testing of BPN14770 is already underway.

“I think our drug could be a useful add-on” to other kinds of Alzheimer’s drugs targeting the buildup of plaque in the brain, such as the Lilly drug, Gurney says.

This week, to help further its clinical studies, Tetra closed on a $10 million Series A round led by the Apjohn Group, a new investor, and Grand Angels, one of the company’s earliest investors. Dolby Family Ventures, the Alzheimer’s Drug Discovery Foundation, and other private investors also contributed. Apjohn’s Donald Parfet will join Tetra’s board of directors as part of the financing.

In addition, the company announced it won two new grants from the National Institutes of Health. The first is a $2 million Phase 2b SBIR grant from the National Institute on Aging, and it supports Tetra’s initial multiple-ascending dose study of BPN14770 in healthy older volunteers. The second, from the National Institute of Mental Health, provides $3 million for Tetra’s drug discovery program for depression. Tetra also has a third drug in the pipeline, a topical treatment for eczema.

Gurney says that in 2017, Tetra will begin enrolling patients for Phase 2 testing of BPN14770—a trial with 180 subjects at 10 to 15 sites. The company also expects to present its study data so far.

“Our first Series A is a milestone for us,” he adds. “It extends our runway by several years.”

Sarah Schmid Stevenson is the editor of Xconomy Detroit/Ann Arbor. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET_AA